CHECKLIST FOR

AUDIT/INSPECTION

AN INITIATIVE BY BARODA ACADEMY, MANGALORE

Compiled by:
Premkumar G
With guidance and inputs from:
Mr. Srinivasa MN
Mr. Trilochan Sahoo (BA, Baroda)
Mr. Prakash M
Mr. Anubhav Srivastava
Mr. Srish Srivastava
Disclaimer:

This is a compilation of bank’s guidelines to help the branches in preparation for audit/
inspection. Staff members are kindly requested to keep themselves abreast of latest circulars.

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 VARIOUS AUDIT IRREGULARITIES IN A NUTSHELL
(OPERATIONS)
ZERO TOLERANCE AREAS
 Mandatory Daily Reports Generation

Daily Reports (along with Menu Options)

1. Exception Report – HEXCPRPT

2. TOD/ Excess Report – HTODRP
3. CUSTOMER MOBILE NO REPORT –

BOBMENU----> MM REPORT----> Report for CUSTMOB

4. INTERSOL Report

OFFSOL - BOBMENU----> WR----> Offsol Report (Thrice a day, 10AM,12 Noon & 3PM)

INTERSOL ---->BOBMENU----> Daily Report----> Intersol Report

5. Transactions in Newly Opened Account - NEWACTR

 KYC Norms to be scrupulously followed during Account Opening

(Pls refer to HO:BR:111:56 dated 7th March 2019)

 ATM Cards Handling (Block using DCARDBLK after 90 days)

 Signature Scanning (Consider closing ‘0’ balance dormant and untraceable accounts)

 Tallying of Security Forms and marking of undelivered chequebooks in UNCHQ

 Display of BCSBI Code and availability of booklet in customer lobby

 CEMU alert Rectification

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 UV screening prior to passing of cheques as per guidelines
(Please ensure availability of U/V scanner through RO)
Cash payment of Rs 10,000/- and above
Clearing/ transfer transactions of Rs 50,000/- and above
All cheques of Rs 2,00,000/- and above to be screened under U/V, stamped and signed.

CASH RELATED

 Maintenance of cash within retention limit as far as possible.

 Maintenance of Bait/ Decoy Money (Cash).

(Refer Pg No 151 of Remittance Book of Instructions)

 Proper maintenance of Key Register and recording exchange of keys.

 Periodic proof check of CCTV back up and Burglary Alarm systems.

(Kindly record the same in Key Register)

 Surprise verification of cash (at least once a month).

 Timely remittance of Soiled Notes.

OTHER AREAS

 Professional Tax Remittance (Monthly basis in Karnataka)

 Mandatory Displays (Comprehensive Notice Board in Trilingual)

 Availability of Complaint/ Suggestion Box

 Availability of portraits of all the three founders, Dr BR Ambedkar along with Gandhiji’s
words on customer.

 Convening Monthly Customer Service Committee Meeting and register maintained for
the same(15th of every month).

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  Convening Fortnightly Staff Meeting (15th of every month) and register maintained for
the same.

 TDS deduction and remittance (Wherever manual deduction is applicable)

Section Nature of Payment Limit Exemption %

194 I Rent If rent paid exceeds Rs 2,40,000/- p.a 10% (L&B)

2% (P&M)
195 Rent(NRI) No threshold limit 31.2%
194 C Payment to Contractors Per bill Rs 30,000/- or Individual/ HUF – 1%
Per Annum Rs 1,00,000
Others - 2%
194 H Brokerage & Per Annum limit – 15,000 5%
Commission
194 J Fee for Prof & Technical Per Annum limit – 50,000 10%
Services

 AMC and refill of fire Fighting, Electrical and Electronic Equipment.

 Altogether discontinuation of handwritten FDRs and DD/BC.

(High potential for fraud observed in this area)

 Reconciliation of Sensitive Accounts (use menu option HMSGOIRP)

Head To be Reversed Within

Proxy Account Same Day
New Intermediary 3 days
Suspense General 15 days

 Monthly ATM Cash Verification Report Submission

 Annual Electrical Audit and inspection by Regional Security Officer and rectification of
irregularities pointed out.

 Maintenance of record of Intersol transaction confirmation given/ obtained.

(Pls refer HO:BR:112:196 dt 08th May 2020)

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 Proper maintenance of R-Menu Requests sent to RO

 Elimination of Duplicate CIF IDs

(BOBMENU- MISC – STATUS REPORT FOR DUPLICATE CUSTOMERS)

 Proper Register maintenance for ATM card delivery

 Kindly ascertain the branch with which the second set of Keys are placed for safe custody.
(Pls note that the receipt should be placed in Branch Head’s Custody and not inside the
strong room)

 Locker migration and rent recovery to be automated.

 Exclusive file to be maintained for Customer Mobile No. change Requests.

 Monthly scrutiny of P&L and Balance Sheet of the branch for any abnormal variation.

 Record for various allowances/incentives/ LFC claims of staff members

(including HRCPC claims)

 Copies of CTR/ STR received from RO to be maintained and monitored.

 Ensure proper marking of attendance by staff and leave application

JOINT RESPONSIBILITY OF KEY HOLDING OFFICIALS & BRANCH HEAD

 MONTHLY TALLYING OF JEWEL PACKETS AND RECORDING OF THE SAME IN BIN

REGISTER

 ENSURING PROPER FUNCTIONING OF BURGLARY ALARM & CCTV ALONG WITH BACK
UPTO 90 DAYS

 SURPRISE CASH VERIFICATION

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 VARIOUS AUDIT IRREGULARITIES IN A NUTSHELL
(ADVANCES)
ZERO TOLERANCE AREAS
 CIBIL Report Generation

 PSR Submission and handling of observations

Sector of Advance Rural/ SU Urban/ Metro

Retail Above 5 Lacs Above 5 Lacs

Others Above10 Lacs Above 25 Lacs

 To be sent within 3 days of sanction

 Staff loans and LABOD accounts excluded

 CERSAI (Wherever applicable)

OTHER AREAS
 CREDIT STARTS WITH PROPER STORAGE/ EXTRACTION OF DOCUMENTS. ENSURE
DOCUMENTS ARE SORTED SCHEME- WISE.

 HACSP menu option available in Report Server may be used for this purpose.

 It is recommended to store Title Deeds and Security Documents separately.

 DNR, Insurance and Review Register maintenance and follow up.

 Eliminate cases of DNR through obtainment, condonation from Regional Head or through
compromise.

 Ensure all advance facilities are released only after accordance of sanction.

 Monthly submission of various reports to RO (Monthly statement of Advance/ PSR,

TOD/ Excess Overdrawn, Bills Purchased/Bill Discounted, Advance Bills etc).

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  Every Advance Account (Customer-Wise) to be reviewed annually.

- Rate of interest of retail advances in which pricing is linked to CIBIL score to be

changed during review EXCEPT IN CASE OF AUTO LOANS.
- PSR to be sent in case of review of accounts also.
- Review may be carried out pending receipt of Financial Statements for limits upto
25 lacs in case of the following: (ONLY IF ACCOUNT IS OTHERWISE IN ORDER)
 Borrowers engaged in trading activities
 Micro & Small Enterprises
 Borrowers in rural areas and
 Borrowers enjoying only term loan facilities
- Status Noting of NPA Accounts to be done Half Yearly.
- Consider short review wherever regular review is not readily possible.

 Credit Information Report from two different agencies as per guidelines (Retail Loans)
(CIBIL & EQUIFAX)

Scheme Report from one Credit Bureau Report from two Credit Bureaus
(BCC:BR:107/628 dt 18/12/2015)

Home Loan Upto 10 Lacs Above 10 Lacs

Auto & Mortgage Loan Upto 5 Lacs Above 5 Lacs
Education Loan Upto 4 Lacs Above 4 Lacs
All other loans Upto 1 Lac Above 1 Lac

 Please ensure all NPA accounts in ‘0’ balance are closed in the system.

 Persisting irregularities of previous inspection to be addressed on a war footing.

 Vetting of Documents (Irrespective of whether mortgage is created or not)

- Customer exposure of Rs 10 lacs and above upto 2 crores by empanelled advocate

- Above 2 crores by RO legal department

 Obtainment of stock statement in all the CC accounts

 Obtainment of Quarterly Information System(QIS) data in all the CC accounts of 1 crore

and above

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  Asset verification to conducted as per guidelines

RATNG/ TYPE OF FACILITY FREQUENCY OF INSPECTION

WORKING CAPITAL RATING (BOB-1/2/3) QUARTERLY BASIS

WORKING CAPITAL RATING (BOB-4,5) ONCE IN 2 MONTHS
WORKING CAPITAL RATING (BOB-6 AND BELOW) MONTHLY

OTHER FIXED ASSETS H.Y (JAN AND JULY)

HOUSING LOAN ONCE IN 2 YEARS

OTHER LOANS ONCE IN A YEAR
FRESH VALUATION REPORT TO BE OBTAINED ONCE IN 3 YEARS IN ALL MORTGAGE BASED ADVANCES
(EXCEPT IN CASE OF STANDARD HOUSING LOAN ACCOUNTS)

 Ensure stage wise pre sanction inspection before disbursement (wherever applicable)

 Ensure all the documents are filled, dated and adequately stamped

 Photograph of financed vehicle along with staff and customer in case of Auto Loans to be
obtained.

 2 sets of blank TTO forms to be obtained.

 VAHAN proof to be kept on record.

 Staff Overdraft to be maintained at the same branch where the staff is posted and salary
mandatorily credited to the SOD Account.

 Latest EC with Bank’s charge to be obtained.

 Supplementary Legal Opinion to be obtained (Wherever applicable)

 Stock Audit completion to be ensured as per guidelines and irregularities rectified.

- Annually for accounts of 1 crore and above

- Half Yearly for accounts of 5 crores and above

 Periodic Academic Records in case of Education Loan to be obtained.

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  Ensure proper charging of interest and EMI flow to avoid revenue leakage and customer
complaints.
 Kindly ensure to feed the same date in both interest demand and principal demand
fields to ensure synchronized recovery. Else system will debit interest and principal on
multiple occasions leading to ambiguity.

 Please note that EMI date should be 4th or 10th as per convenience of the customer in
case of retail accounts.

 Re-appraisal of Gold Packets as per guidelines to be ensured.

(Pls refer BCC:BR:112:67 dated 15 th October 2020)

 Fresh valuation report to be obtained in case all mortgage based loans once in 3 years
(EXCEPT HOUSING LOAN).

PLEASE PAY SPECIFIC ATTENTION TO EXPOSURE ABOVE CUT OFF LIMIT

(Any irregularities in these will be reported in ANNEXURE B and affect submission of CRC)

Branch Category Cut Off Limit

Rural Rs 4 Lacs
Semi – Urban Rs 7 Lacs
Urban Rs 15 Lacs

Metro Rs 25 Lacs

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 REVENUE LEAKAGE CHECK LIST
 Make it a practice to generate account wise list of sanction made in a month on the 1 st
working day of subsequent month and scan for any omission/ irregularity.
 The same data can be used for PSR/ MSA.
 Kindly provide an additional column to track recovery of charges or any observations
pending for rectification

 Pls use the following path in REPORTS SERVER for generating the report

BOBMENU > DATA CENTRE REPORTS > ACCOUNT WISE INTEREST REPORT

 Most of the Revenue Leakage are found in the following parameters:

i) Processing Charges Recovery

ii) Incorrect Rate of Interest
iii) Mortgage Creation Charges Recovery (Except Housing & Education Loans)
iv) Inspection Charges Recovery
v) Commitment Charges Recovery
vi) Modification & Deviation Charges (If applicable)

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 VARIOUS CHARGES TO BE RECOVERED IN ADVANCES
i) Processing Charges –
- Processing Charges mentioned are for a period of 12 months – Pro Rata to be charged if
reviewed beyond 12 months
- Any concession/ waiver to be specifically mentioned with circular

Other than Agriculture

Limit Charges

Upto 25000 (CC)- Fresh/Review Nil

Above 25000 (CC) -Fresh/Review Rs 350 per lac or part there of + GST
Max of Rs 35 lacs for Priority Sector
Max of Rs 17.5 lacs for exporters
Term Loan (Fresh) 1% of limit sanctioned
Cap for Exporters – Rs 50.00 lacs
Cap for P.S– Rs 100.00 lacs
Term Loan (Review) 0.10% of limit

Agriculture

Limit Charges

Upto 3 Lacs Nil

Above 3 Lacs and Upto 10 Lacs Rs 250 per lac or part there of + GST
Above 10 Lacs Rs 350 per lac or part there of + GST
Max of Rs 35 lacs (17.5 lacs for exporters)
Term Loan (Fresh) 1% of limit sanctioned
Cap for Exporters – Rs 50.00 lacs
Cap for P.S– Rs 100.00 lacs
Term Loan (Review)- Above 3 Lacs Rs 60/- per lac

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ii) Rate of Interest to be pegged as per sanction.

- Any concession to be specifically mentioned with circular

- Please ensure compounding of interest in education loans beyond course period
- The report for the same is available in
BOBMENU > ERROR WARNING REPORT > INT ON INT SLAB N
iii) Mortgage Creation Charges (Except Housing & Education Loans)
- To be charged per instance of mortgage creation
- Please note that this has no relevance to various stamp duty/ charges incurred in
the process of charge creation

Limit (F.B + N.F.B) Charges

Upto 10 Lacs Rs 500 per Lac

Above 10- 50 Lacs Rs 5000/-

Above 50 Lacs-100 Lacs Rs 10000/-

Above 100 Lacs Rs 15000/-

iv) Inspection Charges (For Godown Inspection)

- Frequency to be determined based on credit rating

SECURITY FOR FACILITY FREQUENCY OF INSPECTION

WORKING CAPITAL RATING (BOB-1/2/3) QUARTERLY BASIS

WORKING CAPITAL RATING (BOB-4,5) ONCE IN 2 MONTHS
WC RATING (BOB-6 AND BELOW) MONTHLY

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 Non Agriculture

Limit Amount per Instance

Upto Rs 5 Lacs Nil
Above Rs 5 Lacs upto Rs 1 Crore Rs 1000 + GST
Above Rs 1 Crore Rs 5000 + GST
Above Rs 10 Crore Rs 10000 per location + GST (Max of 2 lacs)

Agriculture

Limit Amount per Instance

Upto 3 lacs Nil
Above 3 lacs and upto 10 lacs 250 + GST
Above 10 lacs and upto 1 crore Rs 500 + GST
Above Rs 1 Crore Rs 1000 + GST

v) Modification Charges and Deviation Charges

Modification Charges (When a sanction is modified)

Limit (F.B + N.F.B) Charges

Upto 1 Crores Rs 5000/- + GST

Above 1- 10 Crores Rs 15000/-+ GST

Above 10 Crores Rs 25000/-+ GST

Deviation Charges (When a sanction is accorded with deviation)

Product Charges

Home Loans Rs 1500 per deviation (Max of Rs 5000)

Education Loan Nil

Other Retail Loans Rs 3000 per deviation (Max of Rs 10000)

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vi) Commitment Charges (Accounts with exposure of 1 crore and above)
- Applicable only average utilization in a quarter is less than 60% of sanctioned limit or
as indicated in QIS. (50% in case of non- fund based).

- Retail accounts – Interest will be charged for a minimum of 60% of limit.

- Other than Retail

In case of utilisation below 60% 0.50% of unutilised sanction/ operative limit

MANDATORY ADVANCES CHECK LIST

Maintain the same order to maximum extent possible

 Application Form/135 and KYC+ Invoice

 CIBIL Generation
 Pre-sanction Inspection
 Invoice and ITR verification
 Legal Scrutiny Report
 Valuation Report
 Proposal/ Rating
 Processing Charges Recovery
 Acceptance of sanction
 Documentation
 Mortgage Creation (Wherever applicable)
 Vetting/ Notary (Wherever applicable)
 PSR
 Disbursement
 Insurance
 CERSAI (Wherever applicable)
 Bills
 Post Sanction

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 MANDATORY REGISTERS
The list is indicative and registers may be clubbed as per requirement

 LAD Register
 Review Register
 Insurance Register
 Sanction Register
 Stock Statement Register
 ATM Card Register
 Customer Service Committee Register
 Staff Meeting Register
 Key Register

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